Amphastar's BAQSIMI Acquisition and Its Strategic Implications for 2026 Growth

Amphastar Pharmaceuticals' acquisition of BAQSIMI, a nasal glucagon therapy for severe hypoglycemia, has positioned the company as a key player in a rapidly evolving market. The $500 million upfront payment and $125 million one-year anniversary payment to Eli Lilly, coupled with contingent milestone payments of up to $450 million, reflect a high-stakes bet on BAQSIMI's commercial potential. However, as the company eyes 2026 revenue guidance of high single-digit to low double-digit growth, the durability of BAQSIMI's momentum-and the feasibility of the $450 million contingent milestone structure-remain under scrutiny.

BAQSIMI's Performance: Momentum and Market Share

BAQSIMI has delivered consistent growth since Amphastar assumed commercial responsibility. In Q3 2025, sales reached $53.6 million, a 14% year-over-year increase, marking the product's highest quarterly performance post-acquisition. Management attributes this to expanded sales execution and a 3% U.S. price increase, alongside a 55%-60% market share in the ready-to-use glucagon segment. By 2026, the product is projected to peak at $250 million to $275 million in annual sales, a critical threshold for sustaining Amphastar's revenue trajectory.

Yet, this optimism hinges on BAQSIMI's ability to outperform legacy glucagon products. For instance, glucagon injection sales declined 49% in Q3 2025, while epinephrine sales dropped 12%, as competitors gained traction. BAQSIMI's convenience and ease of use have mitigated some of this erosion, but the competitive landscape remains fragmented.

The Contingent Milestone Structure: Ambiguity and Risk

The $450 million in contingent payments tied to BAQSIMI's sales milestones is a double-edged sword. While it aligns Amphastar's incentives with long-term product success, the lack of publicly disclosed sales thresholds creates uncertainty. According to the 2023 acquisition agreement, these payments are contingent on achieving "annual net sales targets within the first five years post-acquisition", but exact figures remain undisclosed. This opacity complicates assessments of their feasibility.

For context, BAQSIMI's peak sales projection of $250–275 million would require sustained performance across multiple years to trigger the full $450 million payout. If the product's growth slows due to pricing pressures or new entrants, Amphastar could face significant financial strain. The company's gross margin decline to 51.4% in Q3 2025-cited as a result of "product mix changes and increased competition"-highlights the fragility of its current margins.

Strategic Buffers: Pipeline and Production Expansion

Amphastar's 2026 guidance also relies on its broader pipeline. The anticipated launch of AMP-007 (an inhaled product targeting a $1.5 billion market) and generic teriparatide (AMP-015) in 2026 could diversify revenue streams. Additionally, the company is expanding U.S. production capacity at its Rancho Cucamonga headquarters to quadruple output, a move aimed at reducing reliance on international supply chains.

However, these initiatives are not without risks. GLP-1 analog AMP-018 and insulin aspart (AMP-004) are excluded from 2026 projections and expected to launch in 2027, leaving a gap in near-term growth drivers. Meanwhile, litigation costs and rising general and administrative expenses could further pressure profitability.

Conclusion: A Calculated Bet with Lingering Questions

Amphastar's 2026 revenue guidance appears achievable if BAQSIMI maintains its current growth trajectory and the pipeline delivers as expected. The product's 14% YoY sales increase in Q3 2025 and strong market share suggest resilience, but the contingent milestone structure remains a wildcard. Without transparency on sales thresholds, investors must question whether the $450 million payout is realistic in a market where pricing pressures and competition are intensifying.

For now, Amphastar's strategic bets-on BAQSIMI's dominance, production expansion, and pipeline diversification-position it to navigate near-term challenges. Yet, the durability of its growth will ultimately depend on its ability to defend BAQSIMI's market leadership and execute on its development roadmap without missteps.